Squawk Pod: OpenAI’s next round, SpaceX’s big plans, & reforming MBAs – 10/23/26 | Audio Only

Bring in show music, please. >> This is SquawkPod and I'm CNBC producer Cameron Costa. On today's episode, how voters are feeling heading into the midterms. About the economy, about AI, and about the president. CNBC's All-America Economic Survey with our own Steve Leeman. >> President's not on the ballot for the upcoming congressional election, but his presence it is very much felt. where approval ratings are slipping and what the main concerns are with each party. >> Among all adults, the president's net approval rating has fallen from minus70 to minus20. Then the cost of doing business degrees. That is the average MBA will run you upwards of $200,000. We'll hear from Christopher Marquee, the professor who wants to reform the whole thing. >> I've been teaching at business schools for 20 years. I feel that business schools are failing. their students. >> Those conversations, plus Madna's leaked vaccine data, open AI working on a $30 billion funding round and Elon Musk's ambitions for SpaceX and for Tesla. Cell towers, look out. >> Who folds? Who folds first and says, "I will sell to Elon Musk cuz the second somebody does that, then it's the end for everybody else, too." I use the phrase prisoners dilemma, but that's what it is. It is Friday, October 23rd. Squawk Pod begins right now. >> Stand back by in three, two, one. Queue, please. >> Good morning everybody. Welcome to Squawkbox right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Carin and Andrew Ross Sorcin. You've got the NASDAQ this morning indicated down by about 21 points. That's essentially flat after the losses we saw yesterday. The Nasdaq was off by 2.6% yesterday. The NASDAQ 100, those big tech stocks were hit even harder. They were down by 2.9%. And for the week to date, both of those indexes are indicated off. I think the NASDAQ is down by about half a percent and the NASDAQ 100 off by about 3/4 of a percentage point. >> Meanwhile, OpenAI working on what could amount to a $30 billion funding round that would value the company at about $1.25 trillion. That does not include the new capital. Sources telling CNBC investors from the UAE leading the round alongside Philippe Lefon's CO2 management. OpenAI telling investors it's aiming to wrap up a deal by the end of next week, but the size of the round isn't yet final. Other reports said OpenAI had been considering a valuation target of about $1.4 trillion. Company was valued at about $850 billion in March. alongside the new investment OpenAI said to be trying to negotiate a commercial deal to secure more computing capacity uh from the UAE. Uh some people have suggested that this funding round has been a bit softer uh than in previous rounds. The sort of sense that there was everybody rushing to get into this uh that this time the phones weren't ringing off the hook at the same kind of level. $30 billion still a pretty good level, but all this happening ahead of the anthropic IPO, hoping to capture some of the >> halo excitement of that and of course trying to get ahead of whatever that valuation may be. But the question that I have about this is at 1.25, which is lower than 1.4, are we looking not at a $2 trillion anthropic valuation, but are we looking at something that's closer to$ 1.5 trillion, for example? They already said 1.5. They haven't officially said that it's >> No, but that's where I am. That's where you But I'm So, so the question is does that even come down more >> or is this a reflection of the five where it already probably that but who knows where we're heading next, >> right? >> I like when you said it's like see if there's a halo. It's like see if halo means money. See whether they get the uh part of the the early Yeah. I mean, I I just remember yesterday there was one person I was saying about how recent booms and busts, you're always like a real estate guy says, "Please God, let there be another real estate boom." Because I I didn't really I squandered the last one. This tech boom almost looks like it's permanent. And and when now when I said that, I decided that is just death. And then the m then the NASDAQ went down, you know, 800 points. So, um, but doesn't it seem like everything in the world revolves around technology now? And what if you're not in technology? What if, and even Sherwin Williams, it's the the coding for that. Everybody has >> everything is invol everything has some type of >> go back to what what one of our guests said, you know, everything is an AI trade now. You can go all the way down the line and everything in the market's either going to do very well or not. >> I think if you decide a couple years ago, your money manager, you know, tech is over. I'm just going to try to avoid if you avoided and when could you look for when could you not have bought Microsoft in the last 25 years? >> Yeah, >> there was never a time when when you couldn't have bought >> SpaceX is reportedly uh looking to access at least 80,000 cell phone towers in a multi-billion dollar effort to build a fourth nationwide wireless network. This is a Bloomberg report that says Elon Musk company has been uh talking with cellular Tower owner Crown Castle. Uh that stock and competitor American Tower jumped on the news after the closing bell yesterday. shares of AT&T, Verizon, and T-Mobile all fell as I still wonder whether one of these Well, the question is as the prices of these free stocks come, who folds first and says, >> "I I'll sell I will sell to Elon Musk because the second somebody does that, then it's the end for everybody else, too." But there's I use the phrase prisoners dilemma, but that's what it is. >> Do you think that some of this is posturing to try and put pressure? Like is that part of what part of is is part of this the negotiation though where you hear that these talks are taking >> place I imagine it's all >> one of a piece meaning which is he needs to do this he wants to do this he will do this and if along the way this becomes available he then does that >> but I no I don't think that this is a posturing because he has no intention of doing this >> posturing because he wants them to negotiate with him >> oh I'm sure he would like them to I think he knows that at some point he's going to He's he's I mean it's publicly said he's doing this. So I think this is a side effect of that that that those stocks are going to go down and then maybe he has the opportunity to buy them on the cheap. >> It's weird though. There have been a lot of people who have raised questions as to why you would want to get into this low margin business which is a massive amount of capital that has to goes into has to go into it and that's part of this next story too. Semaphore is also reporting that SpaceX could be forced to pay much higher interest costs in its latest debt deal. The site says that the lowest rated portion of bonds that SpaceX plans to sell in a $40 billion deal are expected to yield 8.3%. Some bonds backed by SpaceX computer chips could yield seven and 3/4% but that is still a percentage point higher than where the current SpaceX bonds trade and that's been the question. How much capex does it take to build this? And then as a result, you are in what kind of margin business? >> So here's where I think it gets interesting and I think it's what's driving him. Mhm. >> I think he genuinely believes that in the end connectivity is going to be required for everything. So if you believe that you are going to have an Optimus robot in your house or running around the streets, um some of them will be able to do edge compute themselves, but a lot of them are going to still need to be connected to something. And so there's going to be a shocking amount of data that's going to be throughput. I mean right now obviously uh we obviously use our phones and and whatnot but if you think that every car robo taxi everything has to be controlled and effectively connected in in the either >> he wants to own the infrastructure >> all of that >> that may be a very valuable thing to do and then if you believe the compute is happening either in space or in these data centers that he's operating it all becomes one vertically ated operation. I think that's the >> and that's how he gets to the market potential market size numbers that he talks about with SpaceX. >> I I I think that's the argument. I I I don't know whether it will land there, but I think that's the argument. Uh meantime, talking about arguments, President Trump reportedly spoke with Elon Musk earlier this week and asked the SpaceX CEO to restore Ukraine's full access to the military version of Starlink known as Star Shield. Wall Street Journal report saying that Ukraine had faster access to Star Shield following Trump and Musk's conversations, but higher speeds hadn't returned fully. The Journal reported earlier this week that Musk had ordered SpaceX to throttle Ukraine's Star Shield service. Speaking to reporters yesterday, President Trump said the bottom line, he put it back. Having said that, there's one other wrinkle this which we talked about Joe, which is we keep talking about Star Shield and Star Link. Star Link being the commercial service, Star Shield being the government service run by the US government. There is still some debate about whether Ukraine is using Star Shield or Star Link or a combination of both of those things because also the commercial services of Star Link are such that you can't use them for offensive uh operations. Question line between what's defensive and offensive is kind of interesting. But Marco Rubio uh said quite publicly over the weekend that he believes that Ukraine doesn't use Star Shield, that Ukraine is using Star Link. And then all these other reports talk about Ukraine using Star Shield. >> So if they're using Star Link, it wouldn't be the government's decision whether it gets throttled. >> It may be that there's a combination of these things being used for certain for certain things. I don't think Look, I don't know the answer. I just know that if you if you look at the different comments that are made by people like Marco Rubio who says they have no access to Star Shield and then you look at the reporting which talks about them throttling Star Shield and then you start to think about the commercial services of Star Link. >> Um it you start to start to see a picture that may be a little bit different. We'll see. >> This is fascinating here and great news. Um even though the stock's down but let's talk about the stock when we get done with this. Okay, there's the stock today. shares of madna falling more than 17%. Uh yesterday we've talked about this cancer vaccine and it's not the that type of vaccine. It's a vaccine that actually is sort of a a it cures something that you have. It doesn't prevent something and it was developed uh with Merc and the data uh on this vaccine leaked publicly. >> Uh full data was released later in the day and it is positive. It it it just but we're going to look at Madna's stock price over the past year. Uh, Wall Street may have been anticipating more. I don't know. But there's a sell on the news aspect here. That's what we're talking about. Okay. It was in the It was in the mid 20 mid to low 20s less than a year ago. It had been at 390 during the pandemic because of the Madna vaccine. Fell all the way to the uh to the low 20s or mid20s and then based on what's happening here, it's been moving higher. So, it's down today. Let me tell you about what what uh how this works. Um it's up 500 now we say it it's up 500% this year it's an amunotherapy in conjunction with kitrudo which is that blockbuster merc uh anti-cancer drug but it reduced the risk or recurrence of death in certain melanoma patients by 42% versus with krudo alone which could kitruda works uh pretty well too with melanoma which uh here to four was a tough one um in terms of if it's metastasize. That's why none of us want to dive a freckle, you know, hey, what's that? And it's like you go get a testament and and people I've heard anecdotally, you know, you hear people in your in your neighborhood and stuff no idea that they had melanoma and it comes from some little thing that that you can't even tell. So, it's a tough one. It'd be great. It seems to work pretty well. Um, and it may work on other cancers. >> 33% uh decline in death as well on top of this. I mean this this is pretty miraculous and from what I hear the numbers the data was actually better than or in line with what the street >> I don't think the movement in the stock today when it's been when it's been low 20s and it's now in the 200 >> then people were trying to say well is it it it works very well on melanoma but that's the easiest tumor to go after will it work as well on others but there was no reason really for this decline in the stock yesterday based on the news that was put out. Okay, >> cheese will be next. >> Coming up on Squawk Pod, Steve Leeman has results from CNBC's All America Economic Survey. President Trump may not be on the ballot this November, but his shadow matters. >> 44% of respondents say their biggest worry if Republicans control Congress, allowing President Trump to operate beyond his constitutional power. >> American sentiment heading into the midterms right after this break. This is SquawkPod up an Andrew Q. You're >> watching Squawkbox right here on CNBC. I'm Andrew Oscorin along with Joe Kernin and Becky Quick. >> We're getting more information this morning on Steve Leeman's exclusive All-America survey. This time we're focusing now on the coalition that helped President Trump get back into office two years ago. Steve, good morning. >> Good morning, Becky. President Trump forged an extraordinary coalition to win office in 2024. It included his base and then unusual support from some traditional Democratic groups like Hispanics and young people. But the latest CNBC All-America economic survey shows that coalition seriously weakened among all adults. The president's net approval rating has fallen from -70 to minus20. That's from the beginning of the term to the most recent survey. Latino support falling from -22 to - 38. 18 to 34 year olds. Their net approval falling from minus 28 to minus 53. Even in the South, it was plus two at the beginning of the term. Now it's minus 20. Approval from self-described Trump voters. It's fallen from a net of plus 85 now down to plus 65. That still means 82% approval from Republicans and 90% from self-described MAGA voters. To be sure, President's not on the ballot for the upcoming congressional elections, but his presence, it is very much felt. 44% of respondents say their biggest worry if Republicans control Congress, allowing President Trump to operate beyond his constitutional power. By contrast, 28% say their biggest worry for Democratic control, passing policies of Democratic socialists. And both sides, they're worried about Congress failing to bring down prices. The president left office in 2020 above water on the economy, but there was no second-term honeymoon. He was immediately underwater, likely the result of tariffs. improved a bit by the summer, but with the Iran war and higher gas prices and inflation, the president's economic approval has taken a more serious leg down in this latest survey. The data showed that Republicans, they're likely to continue to back Republican candidates for Congress. The data also showed that extra votes from the coalition that put President Trump in the White House in 2024, they're unlikely to be there for Republicans in 2026. Becky, >> hey, Steve, um, blue collar workers, that's been a big part of the president's coalition. How are they kind of feeling these days about things? >> You know, we did a deep dive on blue collar workers and it's really fascinating. Their views on President Trump on the economy have gone from plus 7 to minus15, but only a very modest decline in their overall approval of the president. They've gone from plus 10 to plus 6. So, they're sticking with the president. At the same time, when we look down at the uh the detail of their congressional preference, blueco collar workers have gone from hope wanting a Republican Congress plus 33 down to plus 21. The problem for the for the Republicans and the president is they are low propensity voters. When we look at their relative interest in this election relative to uh white collar professionals and managers, they rank relatively low in terms of their interest. So the Republicans have to get the bluecollar workers out. um even though their support may be just a bit less than it was the last time around. >> Steve, President Trump was in Iowa last night and I I don't know if you've broken out farmers to see how they're feeling about things. >> Uh we we don't break out farmers. We did show though that uh in the eight competitive Senate states that there's a Democratic preference uh there's congressional preference for Democrats plus four. um we we don't we don't have a specific thing that I've looked at in terms of farmers, but that's clearly an area and it comes from at least two places. One is diesel prices. The other is what's happened with fertilizer and and tariffs. Farmers have taken it on the chin. Of course, the president uh recently uh provided additional aid for farmers uh because of uh some some of those issues. So, it's something to watch. on on another uh network that skews it the opposite way of of of the way we do a lot. It was on on Fox that I saw. They talked to a bunch of farmers who said, "I don't know a single farmer that's actually not going to still vote vote for Trump." But maybe they find people like that, Steve. You know what I mean? Maybe they selectively find people. >> No, but there's a reason that Trump is campaigning there, trying to make >> Well, they're campaigning. Yeah. Everywhere. >> Yeah. Steve, thank you very much. Given what happened with the last given what happened with the last polls in Iowa, I would not venture to take >> is that where that I thought it was Wisconsin. That's right. Which which was that? That lady that crazy lady >> It was Iowa. >> She retired. >> They had plus nine. So I'm not >> I'm not touching Iowa and uh and Joe Joe may be right about the farmers uh in terms of and and and our our data show that there's not a lot of crossing lines. Republicans are not going the other way. It's that extra coalition that's going to be the key to this election. >> Right, >> Steve? Thank you. >> Next, big questions about business school. Are MBAs actually changing the world? >> When you say change the world, what does it even mean? >> Address large societal challenges and problems, climate inequality, you know, sustainability. >> The business school professor arguing that business schools maybe shouldn't exist anymore. I believe that most people who work at Tesla or SpaceX believe they're changing the world. And by the way, I go so far as to say the people who work at JP Morgan think in their own way that they are financing the changing of the world. >> I think people who work at CNBC are changing the world. Okay, Andrew. Am I allowed to think that >> you are? >> SquawkPod will be right back. >> You're listening to SquawkPod. Here's Andrew Ross Orcin. >> Welcome back to Squawkbox. Uh this is a provocative conversation we're about to happen. Uh fall is application season. Students are vying for spots in university programs across the country. Our next guest is generating a lot of buzz with an essay he published in the New York Times last weekend arguing uh that business schools should be shut down and redesigned to focus on societal impact. Joining us right now is Cambridge Business School professor Christopher Marqueis. Good morning to you. >> Good morning. >> So you put this essay out. I assume all of your business school professors that you've you've been teaching at all these different business schools. They must hate you. >> I Well, I don't think they hate me actually. I think that actually a lot of them have come out and said what you're saying is right. I appreciate the courage that you had to say it. Uh and there certainly are some critiques but but the majority >> for those who haven't read this essay, why don't you why don't you give us the the 30 secondond version for the audience? >> Sure. Uh I've been teaching at business schools for 20 years. I feel that business schools are failing their students. They pitch themselves as saying, "We're going to make a difference. You can make a difference in the world. Come to the business school." And it turns out they get slotted into a very narrow set of classes focused on shareholder primacy basically. >> And there's research that shows that people that come out of business schools, you know, that they deliver value to shareholders, not to workers or not to communities. And I think business schools have tried many times to change after Enron, after the financial crisis, the recent focus on share, you know, stakeholder capitalism. All of those have failed. We need something more. >> But don't you, why do you think that that's a function of business school and not a function of a capitalistic system that is incentivizing students uh who then go on to graduate and work in the business world uh to do what this what what what the capitalistic system has has created. Whether you like the capitalistic system or not is a different question. >> My experience with the students that are coming in certainly some of them have that focus but a huge amount that's they they come to business school actually interested in changing careers, changing themselves, changing the world and they come out of they come out at the very end actually sort of the standardized product going into consulting, finance or big tech. like 80% of the people that come out of large business schools go to those three industries. >> So to me there's a slightly different question which is why is it very infrequent that you find any of the great founders that actually build businesses from the ground up going to business school. In fact, some of them don't even go to college. >> Sure. Or drop out. >> Right. Or drop out of college. Exactly. So, uh, >> and so that that it seems like the people that you're teaching, if they're they're being taught anything, are the I hate to say the middle managers, uh, and maybe managing directors and above, but not necessarily the original creators. >> Sure. I mean, I think if you've got a great idea, you know, business school might not be the place to develop into into being an entrepreneur. But, you know, there's a lot huge. >> But isn't that interesting? I imagine there's a lot of people who think, oh, I should go to business school so I can become a great entrepreneur. I can create a great network of people. And part of it is is often times about the networks themselves. >> Sure. And there's you know beyond entrepreneurship there's actually a huge amount of institutions in our world. This could be you know banks or consulting companies but also large NOS's government. Uh so there there's a lot of >> jobs that that you know really high power important influential high impact jobs that people are filling not necessarily just entrepreneurship. So what is it though that you would want to reform about the business schools that would change the outcome later on? >> Well, I think the business schools have put forward this vision of ch you know students changing the world actually design the curriculum around that. >> But when you say change the world, what does it even mean? Does that mean you want them to start NOS's or does that mean that you want them to create new companies? >> Sure. the address large societal challenges and problems, climate inequality, you know, sustainability. I think that that is actually, you know, societal challenges. >> Okay. But isn't that more of I mean I I I hear I hear where you're going with this, but let me let me throw another piece to the puzzle in here. >> It costs a lot of money to go to a business school to pay your salary and the and all of the uh the other money that's uh required. >> And a lot of the a lot of the kids are going into debt to do it. Sure. >> And so then they're saying to themselves, if I'm going to put the money in, I got to get the Again, this is the capitalistic system. I have to come out and get a job that's going to be able to pay off the debt plus. >> Totally agree. I think it's the business schools and higher education in the US costs way, way too much. No doubt about it. But if you think about the students that are going in, again, a huge amount of them actually want to do something either to have a purpose, to make a difference in the world, or to change their career. You think that a company is not create a purpose? I mean, I say this for real. I think, by the way, the people who work, hold on. The the people who work for >> That's not the most obvious question in the world. >> Musk think that they have a grand purpose. They I believe the most people who work at Tesla or SpaceX believe they're changing the world. And by the way, I go so far as to say the people who work at JP Morgan >> think in their own way that they are financing the changing of the world. >> I think people who work at CNBC are changing the world. Okay, Andrew. Am I allowed to think that >> you are? So that's that that's why this sort of definition of changing the world. Um >> so so I I think this is a great great example because I I agree 100% people at at Tesla Elon Musk early days I think that he is someone many of those people there they have a purpose to deliver innovative new technology. No doubt about that. But the people that are going to business school actually they go in wanting that and they come out, you know, working in cons. >> But I'm going to give you I'm going to push back on it. Well, I don't know if this is going to seem mundane to you or not. Joe, I don't know if you want to weigh in or Becky wants to weigh in on this, but the idea No, no. There are people who go work at a consulting firm. You may think that people who work at consulting are it's somehow a mundane role of some sort. >> I imagine that people in that role think to themselves one of two things. Either the younger ones think it's a stepping stone for me to go do something where I can change the world or that I'm gonna help my client do something because they have a purpose to change the world in some way or another. Everybody in their own way is trying to make a dent in the world. The question is what kind of dent are you making? I think you're defining the dent in a particular way. >> So I'm defining the dent in the way that the people actually want to make that dent. I agree with you 100%. There's a lot of consultants. Consulting is a great job for many people. I 100% agree. The issue is that people come in with a different idea of what they want to do with their life and the purpose they have and the systems in the business school. The recruiting systems classes they take channel them into these certain set of uh >> it sounds like the world at large. We all have big ideas and things we want to get accomplished. But but I don't think that going after shareholder value is counter to being able to deliver on some of those things. If you're going after shareholder value, hopefully you are thinking about the employee. You are thinking about the community. If you really want to take care of your shareholders, the way to do it is to take care of that entire ecosystem. Well, I that certainly is an argument, but you know, there's some there are some studies that have come out that have looked at very systematically, very big data on people that when companies appoint business school graduates, they end up lowering the the benefits to labor, wages of labor, they deliver value to shareholders. So, it's basically ex, you know, extraction. >> Right. Part of the essay, I think, is this idea that you believe that students coming out of business schools are ultimately more myopic. Yes. >> About these issues. >> Correct. which is interesting >> and and to be honest I think this is something that's that people are realizing the business school category is a declining category I don't know if you know but most many many large state schools are cancelling their MBAs or have canceled their MBAs so because people don't want to go to them >> well look and people are following the money too they're going into technology AI finding other things that they want to do going finance but you know there's different places that >> oh I totally agree However, you know, the thing is is that it's it's it's almost like um you know, you were sort of a manager at Kodak after the after the um you know, sort of a digital camera came out. A lot of the responses I've got sort of the criticisms I feel like it's you know, it's very knee-jerk defensive and my students ask me when we learn about Kodak like how do they not see the challenges in the world and digital camera being better? And I think that actually a lot of business schools, a lot of business school faculty that actually are very uh much holding on to this old model, it's like being a manager at Kodak in the 1990s. >> Okay, last question because I know we have to go. How do you plan to teach your the the kids in your class? They're not kids really, they're adults. Um differently. >> So throughout my career, and and this is, you know, and there's many people like me, I'm not, you know, sort of unique. I focus on societal problems in my class. So, how can companies actually design their incentive systems, reporting systems, accounting systems, uh, strategies around delivering value to address our societal concerns? >> Is there a company that uses as a role model? I'm curious for the audience. >> Yeah, one company that just popped to mind is a is a Brazilian uh cosmetics company, >> Nura. >> Uhhuh. uh and they are active in s you know delivering uh value to the communities in the Amazon that they uh source their ingredients the people that work for them they are yeah they they do a great job >> this is a much longer conversation Chris thank you appreciate it >> thank you Andrew >> that does it for Squawk Pod today and for the week we made it to Friday is hosted by Joe Kernan Becky Quick and Andrew Ross Sorcin you can tune in weekday mornings on CNBC at 6:00 a.m. Eastern to catch them live for three full hours. And as always, to get the best takes and smartest analysis from our TV show right into your ears, follow us here on SquawkPod wherever you're listening. And please let us know what you think. You can rate this podcast or write us a brief review on Apple Podcasts. And that not only helps us, but it helps other listeners find us. Okay, that's it. Have a great weekend and we will meet you right back here on Monday. >> We are clear. Thanks guys.